Fed Rate Hikes Send Gold Prices Down Amid Strong US Dollar
Gold prices fell on Wednesday as expectations of further Federal Reserve rate hikes lifted the US Dollar to a two-month high, making gold more expensive and thus less attractive to investors. The Fed raised rates by 25 basis points last week, citing efforts to bring inflation back to its 2% target.
The strong US Dollar and elevated Treasury yields are weighing on gold prices, which have been trending downward since the start of the year. The current price of $4,315 is down 1.0% from Tuesday's close.
US Treasury yields remain elevated due to concerns over inflation, despite lower oil prices following positive developments in the Middle East. West Texas Intermediate (WTI) Oil hovers near a two-week low around $89.50, still well above pre-war levels.